80. I should not have said it was "early
days" now to talk about that. I should have thought in business
terms if something was approaching five years, you would be expecting
very clear results. Why is HEROBC being subsumed under this broad
programme, if it is successful?
(Mr Perryman) My understanding is that it is being
subsumed, not because it is not successful, but simply because
we are trying to rationalise the schemes. There is a number of
schemes which have broadly similar aims about bringing together
businesses and higher education more effectively and we are trying
to simplify the procedure both for higher education institutions
and also to help industry to have a clearer understanding of what
is available.

Lord Shutt of Greetland

81. The IOD in its evidence has argued strongly
that the highest educational priority in promoting business performance
and enterprise should be to eradicate high levels of innumeracy
and illiteracy. That is their view, but how do you balance the
expenditure between promoting enterprise, higher education stuff
and all this, against the basics they are talking about? I imagine
they are talking about adult basic education in these terms.
(Mr Perryman) They are indeed. Actually we have a
lot of sympathy with their view. In our recent progress report
on the skills strategy, which we published in the last month or
so, on basic skills and the skills of people at the next level,
below level 2, which in clearer terms would be GCSE level in school
terms, we are quite worried about the numbers of people in that
position. It is quite alarming really that seven million adults
in the UK have low or no qualifications, more than 3.5 million
of those are in the workplace. Our view is that because those
people are going to find it so difficult to gain employment and
to be employable in any sense in our society as society becomes
a higher skilled society, the government regards it as extremely
important to tackle those issues. We have a skills for life strategy,
which was launched in March 2001, which has a target of reducing
the number of people with basic skills problems by 1.5 million
by 2007 with an interim target of 750,000 by 2004. The focus of
that is on adult literacy, on language and on low levels of numeracy.
To date we have helped 300,000 people to go through some basic
skills programmes, so we do regard it as extremely important.
We are investing very significant amounts of money in basic skills
work. The sort of people we are focusing on, for example, are
unemployed people, people who are no longer active in the labour
market, particularly low skilled people, quite a lot of very low
skilled public service workers in the health sector for example,
and also prisoners. We are talking about a very large number of
people. These are very difficult figures to compute, but we believe
actually that industry loses over £4 billion due to poor
literacy and numeracy in the economy, a very great wastage of
talent in our economy. We do feel it is extremely important that
we tackle this issue. How we balance our expenditure on this against
other needs is a very difficult question. We are spending a very
significant amount of money, £0.5 billion per annum, on basic
skills needs, so £1.5 billion over the next three years.
That would compare with £3.2 billion which we spend on all
adult learning in England per annum and, for example, it would
compare with something like £9 billion which we spend on
schools and a similar sum which we spend on the higher education
system. I am not sure it is very easy to be exactly clear about
how we balance one against the other. It does not quite work like
that. What happens is that the Department has a set of public
service agreement targets which it agrees with the Treasury and
it then bids for resources against those public service agreement
targets. We then receive from the Treasury budget each year a
global sum of money for the Department. Ministers then have to
make decisions about how that money is allocated between the various
priorities, but those sums of money tend to be driven by the targets
we are trying to achieve, the level of demand historically for
those particular services and programmes and any changes in balance
we are trying to make. I am sorry that is a rather vague answer,
but it is not an easy question.

82. Do you think you are on target?
(Mr Perryman) We are very definitely on target, in
fact we are ahead of target in delivering against this. We have
over 300,000 who have now been helped by this programme. We also
have a very significant strategy to drive forward change in this
area, including, you may have seen, the Gremlins television adverts
which try to help both individuals and employers think about the
problems associated with low basic skills, but also we have a
substantial amount of work running with employers to try to help
employers to think about how to tackle basic skills problems in
the workplace including toolkits and a workplace promotion campaign
and so on.

Chairman

83. It is important to get people interested
in adult illiteracy problems, but of course the desired objective
is actually doing something about the illiteracy and innumeracy,
is it not?
(Mr Perryman) Absolutely.

84. As long as I can remember we have known
this is a problem. Every minister and every politician I have
met for 30 years has said this is a problem. Apart from yet again
running advertisements, commercials to get people to be interested
in doing something about their own problem, what results have
been achieved? I do not mean people counselled. Is there any evidence
at all that the levels of innumeracy and illiteracy have actually
fallen?
(Mr Perryman) Yes, there is. I believe that the strategy
we have developed around basic skills is probably one of the most
successful strategies the Department has developed over the last
two or three years. We have a special unit which has been established
particularly to drive through work in this area. That unit has
been hugely successful in gaining resources; I have talked about
half a billion pounds a year being put now into basic skills and
that is huge. I am afraid I cannot tell you exactly the amount
of increase, but I can find that information if you would find
it helpful; a very significant uplift in the amount of money we
are spending. It is not just a case of putting some adverts on
the television, an enormously sophisticated strategy has been
developed, including developing a completely new curriculum for
basic skills development, which has three parts to it. You do
level 1, and level 2. We have had to train literally thousands
and thousands of new tutors and assessors to undertake the task
because we simply did not have enough people capable of doing
that work. The people we had doing that work were not doing an
adequate job. We had people who were not following a modern syllabus
and who were not getting the level of results through that we
were looking for. Susan Pember's unit has been tremendously successful
in driving huge change both in putting the right foundations down
to deliver the work and then starting to see really quite high
numbers of people now flowing through programmes who are genuinely
getting significant improvements in their literacy and numeracy.

85. How regularly do you quantify the reduction
in numeracy and literacy? Is there a monthly review or a quarterly
review? What is the way of assessing the business performance
here? I do not mean money spent but actually reducing the number
of people who are illiterate or innumerate and who is doing that
for you?
(Mr Perryman) We have an organisation called the Learning
and Skills Council, which is our most significant agency, it is
an agency which is huge and which delivers most of the Department's
programmes and services. They are responsible for putting in place
arrangements in each local area and are also then responsible
for collecting data about how many people are flowing through
programmes and bringing that back to the Department. I am sorry
that I cannot tell you whether we collect the data on a monthly
or quarterly basis, but we certainly have a quarterly review with
the Learning and Skills Council about the full range of its programmes
and when I say "we" I mean ministers do that and they
are held to account against their full range of programmes. We
have detailed analysis on each of those programmes which flows
into the Department on a regular basis.

86. So you would know in principlenot
this afternoon. You could send us the last 12 months of review
figures which are hard figures of numbers of people who have improved
their numeracy and literacy by specified target amounts.
(Mr Perryman) Yes, I could.

Chairman: That would be extremely helpful.

Baroness Cohen of Pimlico

87. The same question really. I am listening
to a very good description of inputs and not a lot of description
of outputs, which is the trouble with all government programmes
and they do not concentrate on outputs. Presumably your output
can be classified by getting through level 1, level 2, level 3.
(Mr Perryman) That is correct.

88. If we understood what those levels did and
then understood how many people have got through them, we would
be pretty far down the line.
(Mr Perryman) Yes; absolutely.

89. If that is how you keep the statistics,
that would be very useful.
(Mr Perryman) Yes, we can provide you with that information.
I am sorry I do not have it with me now.

90. Maybe it is published.
(Mr Perryman) I am sure it probably is, but I shall
make sure that you are furnished with that information.

Chairman

91. I am afraid we are just about there. May
I throw the last question at you with an unreasonable degree of
brevity in responding to it? Let me reword it slightly. You have
given us a range of answers to a range of questions. We started
off effectively quoting from the Chancellor's own pre-budget report
in November 2002, where he refers to five key drivers for product
performance, one of which was to support science and technology
and the development of more efficient ways of working. Can you
explain your understanding of how the Department for Education
and Skills sees the Department achieving that objective? What
is the connection between the Department for Education and Skills
and the processes which will support science and technology and
develop more efficient ways of working? What will be the approach?
How would you summarise the approach and what are the key priorities
in the Department for achieving that?
(Mr Perryman) The approach we are adopting is that
we think we need to look very carefully indeed at all our services
and programmes to support adults and adult learning. We have begun
a major piece of work in the Department looking at the whole of
our spending on adult learning, which is about £3 billion
a year. We are developing a skills strategy which will be launched
by the government in June of this year. We put out an initial
progress report a month or so ago, which sets out our analysis
of the current deficiencies in terms of skills development in
England and some suggested ways forward. To explain, that is running
in parallel with a review of innovation being held by the DTI.
We understand that their review is likely to report later this
summer, but I understand you are taking evidence from them separately.
In fact the two reviews are running really very closely together
and the two departments are working extremely closely together
on the work. It may just be helpful for me to say a bit more about
some of the key things which are emerging because they are quite
significant in this respect. Firstly, we believe that there are
fundamental problems about basic skills and employability, but
we also believe there are big issues about intermediate skills
and technician level skills in the workplace. We believe there
are major issues about quality of management and leadership, particularly
at middle and junior management level and particularly in small
firms. We believe there are big issues which would be very important
for you as a Committee, about maths, engineering science teaching
at school, in university and how that then connects into the workplace.
We also believe that there are concerns about what some people
call a low skills equilibrium emerging, a low skills, low value
added equilibrium emerging in some sectors of the economy. By
that I mean that on an individual business firm basis companies
make decisions which tend to be more short term and as a result
they tend to opt sometimes for cost cutting strategies rather
than product enhancement and value adding strategies. As a result
of that, they do not get into the innovation/technology debate
that we would like them to get into and the linkage between skills
and innovation is extremely important. Our view, backed by survey
evidence, is that the effective realisation of innovation and
technology development only comes when you have effective management
and leadership of companies and when you have the skilled workforce
to deliver it effectively. Those things are inextricably linked
and we are working quite hard on how we connect those together.
We are also very concerned about making sure that employers have
a bigger say in what is done by the education sector, particularly
by the further education sector. We have a major programme called
Success for All, which is trying to drive change in further
education and make it more responsive to employer needs. We need
to link our Sector Skills Council work with our work with the
further education sector, to make sure that we start to get a
much more responsive supply of skills coming into the economy.
So several things connect our work and that of the DTI on innovation
and we are trying to back up their thinking on innovation with
our response in terms of skills.

Chairman: That is a very useful summary and
we are grateful to you and your colleague, Mr Colman, for coming
this afternoon. Thank you very much indeed.